Capital Protection Funds: is a class of closed-end hybrid fund. Its primary objective is to safeguard investors’ capital in the event of market downturns while simultaneously providing them scope for capital appreciation by participating in upturns of the equity market. The portfolio is skewed towards debt-oriented instruments and only a small portion of the portfolio is invested in equity. These funds come with a lock in period. The capital protection, however, is not guaranteed in India.
Fixed Maturity Plans: A fixed maturity plan is a close-ended debt fund which comes with a fixed lock-in period and limited investment window. Investor’s can only invest in such securities during the New Fund Offer made by the Asset Management Company. The portfolio of such funds consists of debt securities such as certificate of deposit, Corporate Bonds, Treasury Bills and the maturity tenure of these securities is linked to the maturity of the fund.